According to a recent report, Nevada has the highest rate of economic fraud per person in the country.
Nevada had 286 victims of financial fraud per 100,000 residents, according to Tipalti, a finance software firm. Tipalti arrived at this conclusion after analyzing census data and net crime data from 2022 obtained from the Federal Bureau of Investigation. According to the report, the Silver State was narrowly ahead of Delaware, Alaska, California, and Colorado.
Based solely on FBI statistics, Nevada is ranked No. 18 in the country with the highest number of reported cases of fraud, totaling 9,090 victims in 2022. Additionally, the state ranks 19th in terms of the financial losses caused by fraud in 2022, with an estimated loss of $127.3 million.
The Tipalti statement did not respond to requests for comment and does not provide extensive details regarding why fraud rates are so high in Nevada. The FBI statement also lacks specifics about the different types of scams occurring in each state.
Nevada ranked first in the country for fraud, which encompasses a wide range of potentially fraudulent activities, according to two experts from UNLV.
Jason Smith, head of UNLV’s accounting department, suggested that Nevada’s top ranking may be due to a lack of financial literacy among its residents. He also mentioned that Nevada’s favorable corporate inclusion laws and regulations may attract businesses, including those of Elon Musk, which could contribute to an increase in financial fraud cases.
Gregory Moody, director of UNLV’s security program, believes that Nevada’s high concentration of hospitality workers in the gaming industry may make it easier for certain types of fraud to have a significant impact on the state. He also points out that the state’s relatively small population increases the likelihood of it ranking high in per-capita fraud charges.
He explained, “We have a small denominator here, so if a major incident occurs, we have less variability to work with.”
More Severe Attacks
In the past year, Las Vegas has witnessed several high-profile incidents of fraud and security breaches. MGM Resorts International, for example, estimated a loss of $100 million in the fourth quarter due to a nine-day cyberattack that occurred in September. Caesars Entertainment also fell victim to a cyberattack that reportedly resulted in a ransom payment.
Both UNLV experts emphasize that financial fraud is a significant issue, not only in Nevada but throughout the United States. According to the FBI’s 2022 report, fraud complaints decreased by 5% from 2021. However, the total financial losses resulting from fraud increased by 47%, reaching $10.2 billion, compared to $6.9 billion in 2021.
Nevada follows a similar pattern of fewer victims but higher losses in 2022 compared to 2021. In 2021, Nevada reported 17,706 victims, which is 48.6% more than the 9,090 reported victims in 2022, according to the FBI’s Internet Crime Report for that year. Nevertheless, the state experienced a total loss of $83.7 million in 2022, which is 52% less than the $127.3 million loss recorded for the same period the previous year, at $170.7 million.
Moody believes that criminals are responsible for this opposite trend of fewer victims but higher losses by launching more targeted attacks to increase the potential payout.
According to Moody, “The more they target us with these attacks, the more immune we become, and the less responsive we are to them.” To remain effective, they must extract more value from each attack because the more they occur, the less successful they become.
Smith points out that as more aspects of people’s daily lives, such as banking and financial details, are moved online and become susceptible to attacks, the potential for fraud continues to grow.
You can contact Sean Hemmers at [email protected] or follow him on Twitter at @seanhemmers34.